Comparative Study of Sustainability Reporting on the Banking Industry in Several Countries
Levels of credit risk or credit quality, which can be measured by the ratio of non-performing loans (NPL), can be seen as a form of representation in companies, particularly in the banking sector. The purpose of this study is to determine the impact of Sustainability Report disclosure, specifically...
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| Format: | Article |
| Language: | English |
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Chamber of Financial Auditors of Romania
2022-05-01
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| Series: | Audit Financiar |
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| Online Access: | http://revista.cafr.ro/temp/Article_9699.pdf |
| _version_ | 1818009404504539136 |
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| author | Jessabel A. Amadis GELLIDON Yanuar Nanok SOENARNO |
| author_facet | Jessabel A. Amadis GELLIDON Yanuar Nanok SOENARNO |
| author_sort | Jessabel A. Amadis GELLIDON |
| collection | DOAJ |
| description | Levels of credit risk or credit quality, which can be measured by the ratio of non-performing loans (NPL), can be seen as a form of representation in companies, particularly in the banking sector. The purpose of this study is to determine the impact of Sustainability Report disclosure, specifically in each dimension of economic, environmental, and social disclosure, on the credit risk level of each banking company in Indonesia, Singapore, and Malaysia, as measured by the NPL ratio. The effect of Sustainability Reporting disclosure on NPL is consistent with the use of stakeholder, legitimacy, and signalling theories, where the three theories are related and explain to each other that a company does not only function for its own benefit, but also for other stakeholders. This study collected 129 samples from banking sector companies in Indonesia, Singapore, and Malaysia over a three-year period, from 2018 to 2020, using the purposive sampling method. Multiple linear regression was also utilized to evaluate and determine the impact of each component of the Sustainability Report disclosure on the NPL ratio, as well as other control variables. According to the study's findings, the overall disclosure of the Sustainability Report has a significant influence on the NPL ratio in Indonesian and Singaporean banking sector companies, but not in Malaysian companies. Although partially, economic disclosure has a negative and significant impact on NPL in Singapore, whereas environmental disclosure only has an impact on the NPL ratio in Malaysia, and the final factor is the impact of social disclosure, which has a negative and significant impact on NPL in Indonesia. |
| first_indexed | 2024-04-14T05:42:26Z |
| format | Article |
| id | doaj.art-be1c1141795f4de59d57416997b27603 |
| institution | Directory Open Access Journal |
| issn | 1583-5812 1844-8801 |
| language | English |
| last_indexed | 2024-04-14T05:42:26Z |
| publishDate | 2022-05-01 |
| publisher | Chamber of Financial Auditors of Romania |
| record_format | Article |
| series | Audit Financiar |
| spelling | doaj.art-be1c1141795f4de59d57416997b276032022-12-22T02:09:25ZengChamber of Financial Auditors of RomaniaAudit Financiar1583-58121844-88012022-05-012016634835810.20869/AUDITF/2022/166/013Comparative Study of Sustainability Reporting on the Banking Industry in Several CountriesJessabel A. Amadis GELLIDON0Yanuar Nanok SOENARNO1Atma Jaya Catholic University of IndonesiaAtma Jaya Catholic University of IndonesiaLevels of credit risk or credit quality, which can be measured by the ratio of non-performing loans (NPL), can be seen as a form of representation in companies, particularly in the banking sector. The purpose of this study is to determine the impact of Sustainability Report disclosure, specifically in each dimension of economic, environmental, and social disclosure, on the credit risk level of each banking company in Indonesia, Singapore, and Malaysia, as measured by the NPL ratio. The effect of Sustainability Reporting disclosure on NPL is consistent with the use of stakeholder, legitimacy, and signalling theories, where the three theories are related and explain to each other that a company does not only function for its own benefit, but also for other stakeholders. This study collected 129 samples from banking sector companies in Indonesia, Singapore, and Malaysia over a three-year period, from 2018 to 2020, using the purposive sampling method. Multiple linear regression was also utilized to evaluate and determine the impact of each component of the Sustainability Report disclosure on the NPL ratio, as well as other control variables. According to the study's findings, the overall disclosure of the Sustainability Report has a significant influence on the NPL ratio in Indonesian and Singaporean banking sector companies, but not in Malaysian companies. Although partially, economic disclosure has a negative and significant impact on NPL in Singapore, whereas environmental disclosure only has an impact on the NPL ratio in Malaysia, and the final factor is the impact of social disclosure, which has a negative and significant impact on NPL in Indonesia.http://revista.cafr.ro/temp/Article_9699.pdfbankingsustainability reporteconomic disclosureenvironmental disclosuresocial disclosurenon-performing loan |
| spellingShingle | Jessabel A. Amadis GELLIDON Yanuar Nanok SOENARNO Comparative Study of Sustainability Reporting on the Banking Industry in Several Countries Audit Financiar banking sustainability report economic disclosure environmental disclosure social disclosure non-performing loan |
| title | Comparative Study of Sustainability Reporting on the Banking Industry in Several Countries |
| title_full | Comparative Study of Sustainability Reporting on the Banking Industry in Several Countries |
| title_fullStr | Comparative Study of Sustainability Reporting on the Banking Industry in Several Countries |
| title_full_unstemmed | Comparative Study of Sustainability Reporting on the Banking Industry in Several Countries |
| title_short | Comparative Study of Sustainability Reporting on the Banking Industry in Several Countries |
| title_sort | comparative study of sustainability reporting on the banking industry in several countries |
| topic | banking sustainability report economic disclosure environmental disclosure social disclosure non-performing loan |
| url | http://revista.cafr.ro/temp/Article_9699.pdf |
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